TechnipFMC Announces Fourth Quarter 2024 Results

Business Wire 27-Feb-2025 6:45 AM

• Subsea inbound of $2.7 billion in the quarter; full-year orders of $10.4 billion
• Total Company backlog of $14.4 billion increased 9% versus the prior year
• Cash flow from operations of $579 million in the quarter; free cash flow of $453 million
• Shareholder distributions to grow at least 30% in 2025 versus the prior year
• Subsea inbound orders anticipated to exceed $10 billion in 2025

TechnipFMC plc (NYSE:FTI) today reported fourth quarter 2024 results.

Total Company revenue in the fourth quarter was $2,367.3 million. Net income attributable to TechnipFMC was $224.7 million, or $0.52 per diluted share. These results included after-tax charges and credits of $11.5 million of expense, or $0.03 per share, which included the following pre-tax items (Exhibit 6):

• Restructuring, impairment and other charges of $14.6 million; and
• A loss on the disposal of the Measurement Solutions business of $3.9 million, which represented a charge attributable to final adjustments made subsequent to the close of the transaction.

Adjusted net income was $236.2 million, or $0.54 per diluted share (Exhibit 6). Adjusted net income included the following items:

• A discrete non-cash, positive net tax benefit of $54 million due to the release of valuation allowances which resulted from the Company's assessment of the carrying value of its deferred tax assets and future projections of income; and
• Foreign exchange gain of $5.7 million after-tax, or a loss of $3.2 million before-tax.

Adjusted EBITDA, which excludes pre-tax charges and credits, was $351 million; adjusted EBITDA margin was 14.8 percent (Exhibit 8).

When excluding the after-tax impact of foreign exchange gain of $5.7 million, net income was $219 million. Adjusted EBITDA, excluding foreign exchange loss of $3.2 million, was $354.2 million (Exhibit 8).

Total Company revenue in the full year was $9,083.3 million. Net income attributable to TechnipFMC was $842.9 million, or $1.91 per diluted share. These results included after-tax charges and credits totaling $39.7 million of income, or $0.09 per share, which included the following pre-tax items (Exhibit 6):

• A gain on the disposal of the Measurement Solutions business of $71.3 million; and
• Restructuring, impairment and other charges of $25.8 million.

Adjusted net income was $803.2 million, or $1.82 per diluted share (Exhibit 6). Adjusted net income included the following items:

• A discrete non-cash, positive net tax benefit of $114.6 million due to the release of valuation allowances which resulted from the Company's assessment of the carrying value of its deferred tax assets and future projections of income; and
• Foreign exchange loss of $16.7 million after-tax, or $28.5 million before-tax.

Adjusted EBITDA, which excludes pre-tax charges and credits, was $1,351.1 million; adjusted EBITDA margin was 14.9 percent (Exhibit 9).

When excluding the after-tax impact of foreign exchange of $16.7 million, net income was $859.6 million. Adjusted EBITDA, excluding foreign exchange of $28.5 million, was $1,379.6 million (Exhibit 9).

Doug Pferdehirt, Chair and CEO of TechnipFMC, stated, "This was another year of tremendous success for the TechnipFMC team, and I am proud to report our strong quarterly and full-year results. We achieved total Company inbound of $11.6 billion for the full year—driving year-over-year growth in backlog to $14.4 billion. Subsea inbound orders increased to $10.4 billion, representing our fourth consecutive year with a book-to-bill greater than one. This inbound was characterized by growth in iEPCI™, Subsea 2.0^®, and Subsea Services, and benefited from a significant level of direct awards."

"Total Company revenue for the year grew 16% to $9.1 billion. Adjusted EBITDA improved to $1.4 billion, an increase of 47% when compared to the prior year, excluding the impact of foreign exchange. Cash flow from operations for the full year increased 39% to $961 million, driving growth in free cash flow of 45% to $679 million. We returned $486 million to shareholders—nearly double what we distributed in the prior year."

Pferdehirt continued, "Our unique combination of direct awards, iEPCI™, and Subsea Services continues to represent an even greater share of our business—growing to more than 80% of total Subsea inbound in 2024 and underpinning the quality of our expanding backlog. We consider this growth to be clear validation of the differentiated value we bring to our clients' projects."

"Both iEPCI™ and Subsea 2.0^® orders reached new records in 2024. The value of iEPCI™ awards grew nearly 25%, with Subsea 2.0^® tree inbound increasing more than 50% versus the prior year. In the fourth quarter, we were awarded an iEPCI™ contract utilizing Subsea 2.0^® technology from TotalEnergies for the GranMorgu project—the first oil and gas development offshore Suriname."

Pferdehirt added, "Surface Technologies benefited from the proactive steps taken to refocus the business. We are capturing the benefits of targeted actions, including the sale of our Measurement Solutions business and optimization of our Americas portfolio. The growth we anticipated in the Middle East is materializing, driven by the ramp up in activity in the United Arab Emirates and the Kingdom of Saudi Arabia, and this represents a differentiated growth opportunity for our company."

"We remain positive on the outlook for energy given the anticipated growth in demand, with affordability and security of supply now major considerations. We have secured $20.2 billion of subsea orders over the past two years, and our strong market visibility gives us confidence we will exceed $10 billion of inbound in the current year—delivering on our guidance of $30 billion over the three-years ending 2025. We are also experiencing increased visibility into the pipeline of longer-term opportunities, supported by a growing list of named projects that extends beyond the historical planning horizon, giving us even greater confidence that activity will remain robust through the end of the decade."

Pferdehirt concluded, "We continue to lay the groundwork for further improvement ahead—with multiple levers to drive business performance, some of which are less visible to our external stakeholders, yet are very much within our control. We are committed to sharing the benefits of our improving financial results and growing cash flow through shareholder distributions—with our 2025 target now being increased to at least 70% of free cash flow—driving year-over-year growth in distributions of at least 30%."

"I am very proud of our accomplishments and the momentum we have built to create a truly unique company in an industry that was ready for a better way forward. 2024 was indeed a major milestone for TechnipFMC, on our more ambitious journey."

Subsea reported fourth-quarter revenue of $2,047.9 million, an increase of 1 percent from the third quarter. Revenue increased sequentially due to higher activity in the Gulf of America and Africa, largely offset by lower activity in Latin America and Asia Pacific following the completion of project milestones in the third quarter.

Subsea reported an operating profit of $230 million. Operating profit declined sequentially due to seasonally lower vessel-based activity and the mix of projects executed from backlog in the period. Results were also negatively impacted by $13.1 million of higher restructuring, impairment and other charges. Operating profit margin decreased 300 basis points to 11.2 percent.

Subsea reported adjusted EBITDA of $338.6 million, a decrease of 8.7 percent when compared to the third quarter. The sequential decline was driven by lower vessel-based activity and the mix of projects executed from backlog in the period. Adjusted EBITDA margin decreased 180 basis points to 16.5 percent.

Subsea inbound orders were $2,698.5 million for the quarter. Book-to-bill in the period was 1.3x. The following awards were included in the period:

• TotalEnergies GranMorgu iEPCI™ project (Suriname) Major* integrated Engineering, Procurement, Construction and Installation (iEPCI™) contract by TotalEnergies for its GranMorgu project on Block 58, the first oil and gas development offshore Suriname. TechnipFMC's contracted scope for the project includes Subsea 2.0^® tree systems, manifolds, connectors, and topside control equipment. The Company will also supply umbilicals, flexible jumpers, and flexible risers. *A ‘major' contract is more than $1 billion, and this represents the value of the contracted scope awarded to the Company.

• Shell Bonga North project (Nigeria) Substantial* contract by Shell Nigeria Exploration and Production Company Limited to supply Subsea 2.0^® production systems for the Bonga North development in Nigeria. The contract covers the design and manufacture of subsea tree systems, manifolds, jumpers, controls, and services. *A ‘substantial' contract is between $250 million and $500 million.

Collaboration Agreement:

• TechnipFMC and Prysmian Announce Floating Offshore Wind Collaboration Agreement TechnipFMC and Prysmian announced the two companies have signed a collaboration agreement to further accelerate the global development of floating offshore wind to help meet growing demand for renewable electricity. The collaboration agreement brings together the technologies and competencies of these two offshore industry leaders, providing the unique capabilities to pioneer a complete water column solution, from seabed to ocean surface. The collaboration will leverage the unparalleled expertise of TechnipFMC's system design and integration capabilities in dynamic offshore applications with Prysmian's global leadership in the production and installation of submarine power cable systems. The companies aim to deliver the optimized solution through an iEPCI™ commercial model. Integrated execution of this new solution—which includes mooring and anchoring and both dynamic inter-array and export cable systems—will improve project economics and derisk execution plans.

Surface Technologies reported fourth-quarter revenue of $319.4 million, a decline of 0.3 percent from the third quarter. These results were driven by lower activity in North America, largely offset by increased project activity in international markets, particularly in the Middle East.

Surface Technologies reported operating profit of $36.5 million, an increase of 8.3 percent versus the third quarter. Operating profit increased sequentially due to higher project activity in international markets, and a $1.9 million decrease in restructuring, impairment and other charges. These results were partially offset by lower activity in North America, and a $3.9 million loss on the disposal of the Measurement Solutions business, which represented a charge attributable to final adjustments made subsequent to the close of the transaction. Operating profit margin increased 90 basis points to 11.4 percent.

Surface Technologies reported adjusted EBITDA of $53.5 million, an increase of 9 percent when compared to the third quarter. Results increased due to higher project activity in international markets, partially offset by lower volumes in North America. Adjusted EBITDA margin increased 150 basis points to 16.8%.

Inbound orders for the quarter were $225 million, a decrease of 30 percent sequentially. Backlog ended the period at $858.2 million.

Corporate and Other Items (three months ended, December 31, 2024)

Corporate expense was $37.9 million.

Foreign exchange loss was $3.2 million.

Net interest expense was $13.5 million.

Income tax was a benefit of $17.8 million and included a discrete non-cash, positive net tax benefit of $54 million due to the release of valuation allowances. The release of the valuation allowances resulted from the Company's assessment of the carrying value of its deferred tax assets and future projections of income.

Total depreciation and amortization was $107.1 million.

Cash provided by operating activities was $578.9 million. Capital expenditures were $126.2 million. Free cash flow was $452.7 million (Exhibit 11).

Cash and cash equivalents increased $320.2 million sequentially to $1,157.7 million. Gross debt declined $81.5 million sequentially to $885.2 million. The Company ended the period with net cash of $272.5 million (Exhibit 10).

During the quarter, the Company repurchased 2.4 million of its ordinary shares for total consideration of $70 million. When including the dividend payment of $21.2 million, total shareholder distributions in the quarter were $91.2 million. For the twelve months ended December 31, 2024, the Company's total shareholder distributions were $486 million.

On January 23, 2025, Moody's Ratings upgraded TechnipFMC to investment grade, raising its rating to ‘Baa3' from ‘Ba1' while maintaining its positive outlook for the issuer-level ratings on the Company's senior unsecured notes due 2026.

2025 Full-Year Financial Guidance¹

The Company's full-year guidance for 2025 can be found in the table below.

Updates to Subsea guidance, previously issued on October 24, 2024, are as follows:

• Subsea revenue in a range of $8.4 - 8.8 billion, which increased from the previous guidance range of $8.3 - 8.7 billion.
• Subsea adjusted EBITDA margin in a range of 19 - 20%, which increased from the previous guidance range of 18.5 - 20%.

Teleconference

The Company will host a teleconference on Thursday, February 27, 2025 to discuss the fourth quarter 2024 financial results. The call will begin at 1:30 p.m. London time (8:30 a.m. New York time). Webcast access and an accompanying presentation can be found at www.TechnipFMC.com.

An archived audio replay will be available after the event at the same website address. In the event of a disruption of service or technical difficulty during the call, information will be posted on our website.

About TechnipFMC

TechnipFMC is a leading technology provider to the traditional and new energy industries; delivering fully integrated projects, products, and services.

With our proprietary technologies and comprehensive solutions, we are transforming our clients' project economics, helping them unlock new possibilities to develop energy resources while reducing carbon intensity and supporting their energy transition ambitions.

Organized in two business segments — Subsea and Surface Technologies — we will continue to advance the industry with our pioneering integrated ecosystems (such as iEPCI™, iFEED™ and iComplete™), technology leadership and digital innovation.

Each of our approximately 21,000 employees is driven by a commitment to our clients' success, and a culture of strong execution, purposeful innovation, and challenging industry conventions.

TechnipFMC uses its website as a channel of distribution of material company information. To learn more about how we are driving change in the industry, go to www.TechnipFMC.com and follow us on X @TechnipFMC.

This communication contains "forward-looking statements" as defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements usually relate to future events, market growth and recovery, growth of our new energy business, and anticipated revenues, earnings, cash flows, or other aspects of our operations or operating results. Forward-looking statements are often identified by words such as "guidance," "confident," "believe," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could," "may," "will," "likely," "predicated," "estimate," "outlook," "commit" and similar expressions, including the negative thereof. The absence of these words, however, does not mean that the statements are not forward-looking. These forward-looking statements are based on our current expectations, beliefs, and assumptions concerning future developments and business conditions and their potential effect on us. While management believes these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All of our forward-looking statements involve risks and uncertainties (some of which are significant or beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Known material factors that could cause actual results to differ materially from those contemplated in the forward-looking statements include unpredictable trends in the demand for and price of oil and natural gas; competition and unanticipated changes relating to competitive factors in our industry, including ongoing industry consolidation; our inability to develop, implement and protect new technologies and services and intellectual property related thereto; the cumulative loss of major contracts, customers or alliances and unfavorable credit and commercial terms of certain contracts; disruptions in the political, regulatory, economic and social conditions, or public health crisis in the countries where we conduct business; unexpected geopolitical events, armed conflicts, and terrorism threats; the refusal of the Depository Trust Company to act as depository and clearing agency for our shares; the impact of our existing and future indebtedness; a downgrade in our debt rating; the risks caused by our acquisition and divestiture activities; additional costs or risks from increasing scrutiny and expectations regarding sustainability matters; uncertainties related to our investments, including those related to energy transition; the risks caused by fixed-price contracts; our failure to timely deliver our backlog; our reliance on subcontractors, suppliers and our joint venture partners; a failure or breach of our IT infrastructure or that of our subcontractors, suppliers or joint venture partners, including as a result of cyber-attacks; risks of pirates and maritime conflicts endangering our maritime employees and assets; any delays and cost overruns of capital asset construction projects for vessels and manufacturing facilities; potential liabilities inherent in the industries in which we operate or have operated; our failure to comply with existing and future laws and regulations, including those related to environmental protection, climate change, health and safety, labor and employment, import/export controls, currency exchange, bribery and corruption, taxation, privacy, data protection and data security; uninsured claims and litigation against us; the additional restrictions on dividend payouts or share repurchases as an English public limited company; tax laws, treaties and regulations and any unfavorable findings by relevant tax authorities; significant changes or developments in U.S. or other national trade policies, including tariffs and the reactions of other countries thereto; potential departure of our key managers and employees; adverse seasonal, weather, and other climatic conditions; unfavorable currency exchange rates; risk in connection with our defined benefit pension plan commitments; and our inability to obtain sufficient bonding capacity for certain contracts as well as those set forth in Part I, Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and our other reports subsequently filed with the Securities and Exchange Commission.

We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by law.